Business Relocation/Economic Expansion

I was just listening to an interesting podcast about the history of Southbend, Indiana https://westsb.com/morepeoplepod
A kind of throwaway line in the last episode was them reflecting on when headquarters move out of the area, and how at first when they have seen an HQ leave its usually “not that many jobs, don’t worry everyone”. Then over the next 20 years the company always starts to think, why do we have so many important jobs away from our HQ? Their opinion was that it was always a big loss eventually to have a HQ move away.

Something else I heard somewhere (can’t remember) is that there is a BIG correlation with corporate giving and HQ. Executives almost always decide to find charities or public giving where they live.

4 Likes

They already have offices in Two Hannover Square (BB&T Building)

Oracle relocating HQ to Austin. Man, that place gets everything lately.

3 Likes

Oracle is a dinosaur…BUT they are a Fortune 100 company and the HQ move is a big deal.

I don’t get it. Raleigh has 3 major research universities based here; not to mention the smaller a school. Austin has 1…and it isn’t Harvard or MIT. Texas will remain conservative Red a lot longer than North Carolina will…I just don’t get what we need to make that breakthrough.

5 Likes

I agree, I think they are looking at the Texas tax code.I also bet the State of Texas gave them a lot of $$$$$.to relocate an texas is more centrally located in comparison to Raleigh.

1 Like

I’m happy to watch Austin overheat. I was there a few times 2 Summers ago and it’s getting really ugly once you leave their downtown area. It’s a mishmash of uncontrolled suburbia, and it’s starting to look like Houston in that regard. No thanks.

6 Likes

And we think that the suburbia here is cookie cutter. Sure, it is, but basically all of Dallas/Austin/Houston suburbs look exactly the same: brown stone and concrete streets with Bermuda grass. It’s ugly.

1 Like

It’s not that it’s cookie cutter, it’s that it’s uncontrolled in a Texas sort of way, where it’s obvious that people do what ever they damn well please, because, you know, freedom.

At the end of the day it comes down to taxes & incentives, Raleigh/Wake Chamber just isn’t as aggressive when it comes to that!!!

But the people there like it there they don’t care about the suburban kook, they don’t care about that like we do and we need to do the same. They have better taxes, and more opportunities in the suburbs. in fact, Houston gonna replace Chicago as the third largest city, and the Houston metro which I’ve found weird is by 560k smaller than the Dallas-Fort Worth metropolitan area, but by 2040 that will change too.

Freedom mean they don’t have to pay the water bill in Texas.

I agree. Went last fall just to see what the hype was about. Underwhelmed, I don’t get it. You are right , it is starting to look like Houston.

1 Like

I have no desire to be a Texas like city. Go see one and you will quickly change your mind.

2 Likes

Yeah, that pesky freedom, it’s a bitch until you lose it.

1 Like

Maybe you’d be happier there? Apparently a lot of folks are, and that’s why they are going there. We are all free to follow our own path, and 50 different states give us opportunities to do just that within our own country. It’s quite a privilege.

3 Likes

And hundreds of countries, I’ve been to many of the ones that don’t have freedom, they are not that popular with the people that live in them.

“it comes down to taxes & incentives”

Especially for the high-skill industries that Raleigh is competing for, business incentives are marginal. (They matter more for lower-skill jobs, which Raleigh can’t compete for because local salaries are too high. Eastern NC might want those, though.) Another point that Bartik makes: most jobs are created in place, not moved, so the most cost-effective ways to create new jobs are to invest in the people and firms you already have.

Real estate costs are also far less than most people assume; rent and income tax are huge items on personal budgets, but they’re much smaller percentages of corporate budgets! Think about the budget for a theoretical but growing business, for whom labor is 70% of expenses, real estate occupancy costs are 6%, and state income taxes are 0.4% (i.e., 2.5% of a 15% net profit margin). A 5% improvement in productivity, due to superior workforce quality, is a 3.5% top-line improvement. To get to the same 3.5% budget improvement on the bottom line, you’d need a 60% cut in annual rent, or an (impossible) 10-year state tax holiday every year.

1 Like

“Taxes & Incentives” do matter but thats a bit of an oversimplification to just argue this is why Austin & Texas are kicking our ass currently in the Bay Area exodus (which is also a stretch term).

HB2’s taint still lingers to this day. I know this for a fact. It still makes recruiting progressive companies hard even now. When Texas is considered more progressive than NC…we have a problem.

Raleigh’s Downtown needs to grow up too (faster). Getting bogged down in the nonsense of the OneWake contingent just further slows us down. Every entry point into Downtown Raleigh is embarrassing…we currently have no Gateway that says “Raleigh is grown up”. Downtown is surrendered by underwhelming real estate like the parcel DTS will be built upon. Time has passed for Raleigh to step up and part of that is perception of what DTS would create.

10 Likes

I agree that politics and/or perception thereof is a disadvantage for NC. We can argue how big of a factor it is

HB2 hangover may still linger around… but also it didn’t help to have several divisive topics on the ballot eg voter ID WHILE you are waiting to hear from Amazon and Apple on their decision. These companies have to do a tough trade off - certainly lower taxes and business friendly environment help them, but publicity and image is important for their mission, recruiting etc. Texas just does it a bit smarter - tax and business friendly while still reasonably conservative without the occasional éclat here. Another point mentioned by the recruiters was that these companies seek political stability - the ongoing battle between our Governor and legislation portraits the opposite.

2 Likes

This is so true. The ONLY formal approach to the core of the city that tells a strong story for Raleigh is the approach on Hillsborough, and that’s a ‘hidden’ approach that one wouldn’t purposely take. Approaching from both the north and south are severely lacking. Smoky Hollow is beginning to shape a better entrance from the north, but there’s still a few miles of crap to the north of it that should be purposefully addressed. The approach up S. Saunders also looks like garbage, and you only get a welcoming feeling when you finally crest the long hill at the money shot.
Image matters. Brand matters.

6 Likes